Before PC12 cells, permanently differentiated into neuron-like cells by ras oncogene, are grafted into brain as replacements for missing neurons, it is necessary to further define their neuronal phenotype. We had found that ras-differentiated PCI2 cells in vitro, are both catecholaminergic and cholinergic, but that the intracellular amounts of dopamine and norepinephrine, are less than that in naive PCI2 cells. The neuronal phenotype induced by the ras oncogene appears to follow much of the differentiation path taken by nerve growth factor (NGF). Both ras infection and NGF of PCI2 cells result in a down-regulation of receptors for epidermal growth factor, augmentation of Na + channels and tetanus binding sites, and a decrease in calpain activity. However, the effects of the two agents diverged in two aspects. While NGF induced the production of a surface glycoprotein, NILE, ras did not. The protein kinase inhibitor K252a, which prevents neurite formation in NGF-treated PC12 cells has no such effect on ras-treated cells. The pathway of differentiation in PC12 cells treated with ras thus diverges from that taken by NGF. The regulatory G-protein, P21, encoded by the ras oncogene acts at a different point from that of NGF. As the Schwann cell (SC) is a neighbor of the PC12 cell progenitor, the chromaffin cell of the adrenal gland, we have examined the interactions between the PCI2 and SC in vitro. SC, derived from sciatic nerve, forms clusters upon which naive PCI2 cells aggregate. This affinity for SC is expressed even earlier by ras -PC12 cells. There is no affinity for fibroblasts in the same co-cultures, or for astrocytes or endothelial cells. Neurite extension is supported by SC cells or their matrix and some SC ensheath PC12 neutrites. In co-cultures, choline acetyltransferase increases while acetylcholinesterase is largely unchanged.